Chapter Seven
1. For a definition of credit risk, please see Chapter on ‘Credit Risk’.
2. For a detailed discussion on the subject, please see chapter on ‘Capital-Risk, Regulation and Adequacy’.
3. Edward Altman, E. L., ‘Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy, The Journal of Finance, 23, (1968): 589–609.
4. The original model was built with data from 66 sample firms, of which half had filed for bankruptcy. The database constituted firms with assets of over $1 million with less than $25 million in sales, and engaged in manufacturing activity. However, the model is reported to provide a satisfactory degree of accuracy in predicting failure in non-manufacturing firms as well.
5. Edward Altman, R. Haldeman ...
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